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Written by Sean Williams for The Motley Fool->
On Dec. 31, Warren Buffett retired as Berkshire's CEO and handed the reins to Greg Abel.
Berkshire Hathaway's first-quarter operating results highlight, in detail, Abel's latest $234 million purchase.
This stock, which is near and dear to Buffett's heart, was historically pricey leading up to his retirement, but now offers perceived value to his successor.
One of Wall Street's trillion-dollar companies, Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB), finds itself in uncharted territory. On Dec. 31, its longtime boss, billionaire Warren Buffett, retired as CEO and handed the baton to Greg Abel. Although the Oracle of Omaha remains chairman of the board, the company's day-to-day operations and the oversight of its 48-stock investment portfolio fall to Abel.
Since Buffett and Abel share similar investment philosophies -- a focus on the long-term and an insatiable desire to get a good deal -- this leadership transition should be seamless.
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Perhaps unsurprisingly, Abel completed his first quarter as CEO by purchasing $234 million of Warren Buffett's favorite stock.
Warren Buffett retired as CEO on Dec. 31, 2025. Image source: The Motley Fool.
When investors want to keep tabs on which stocks Wall Street's brightest money managers are buying and selling, they can reference Form 13F filings with the Securities and Exchange Commission. This is a required quarterly filing for institutional investors with at least $100 million in assets under management.
However, not all of Berkshire Hathaway's investment activity is reflected in its quarterly 13F. To get the complete story of what Buffett (and now Abel) has been up to, investors will need to peruse Berkshire's quarterly operating results. On the final page before the executive certifications, investors can find a detailed purchasing history of Buffett's No. 1 stock... shares of his own company, Berkshire Hathaway.
In March, Abel green-lit the repurchase of 33 Class A shares (BRKA) and 431,462 Class B shares (BRKB). The roughly $234 million spent on buybacks in March increased the aggregate total used to repurchase Berkshire Hathaway stock to $78 billion since mid-July 2018. It also marked the first buyback activity for Berkshire since May 2024.
The now-retired Oracle of Omaha and his understudy went 21 months without repurchasing a single share for one reason: valuation.
Although Buffett bent and broke some of his unwritten investing rules over six decades, he was unwavering when it came to value. Buffett's and Abel's willingness to wait for valuations to come into their wheelhouse is precisely why Berkshire's cash balance (including U.S. Treasury bonds) reached an all-time high of $397 billion in the first quarter. Not even Buffett's No. 1 stock is exempt from this desire to nab a bargain.
When Berkshire Hathaway's board amended the rules governing buybacks in mid-July 2018, Buffett kicked off a streak of repurchasing shares for 24 consecutive quarters. During this span, Berkshire's stock regularly traded between a 20% and 50% premium to its listed book value.
BRK.A Price to Book Value data by YCharts.
But in the 18 months leading up to Buffett's retirement, this premium to book value commonly hovered between 60% and 80%. With no clear discount to intrinsic value, 21 months passed without any share buybacks.
In March, Berkshire Hathaway's price-to-book ratio dipped as low as 1.4 (i.e., a 40% premium to book value), triggering Abel to act as his predecessor would.
Abel, like his former boss, recognizes the importance of share buybacks. In addition to reducing the company's outstanding share count and boosting earnings per share over time, buybacks incentivize long-term investing by incrementally increasing ownership stakes. This was a foundational principle that Buffett led by, and it's one that Greg Abel will continue to rely on.
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Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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